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HMRC internal manual

Lloyd's Manual

Syndicate accounts: taxation: syndicate and personal expenses

Syndicate level expenses

The syndicate’s expenses are allowable subject to normal rules on the computation of business profits.

The main syndicate expenses are those incurred by the managing agent in respect of the active underwriter and claims handling staff, and general administration. They may be cross-checked against the managing agent’s accounts.

‘Personal expenses’

The syndicate managing agent will also meet certain expenses on behalf of the members. These ‘personal expenses’ are not generally shown in the underwriting account, but are deducted from the year of account balance on the balance sheet, with details of the deduction shown only in a note to the accounts.

They are included within the syndicate’s overall trading result by virtue of FA93/S184 (2)(c) for individual members (LLM5050) and FA94/230(2)(b) for corporate members (LLM4140).

Agents’ profit commission

Managing agent’s and members’ agent’s profit commission are examples of ‘personal expenses’.

They are both allowable expenses of the trade (LLM4140 and LLM5150). Managing agent’s commission is included within the syndicate’s trading result.

The profit commission and salary of members’ agents are dealt with as non-syndicate matters for individuals under FA93/S172 (1)(c). An estimated deduction for member’s agents’ fees is generally shown in the notes to the accounts under the heading of ‘personal expenses’.